Capital Gains Tax after 1 Financial Year?
Hey all,
Say I have £21,000 in a bank account abroad and I want to transfer this over to a bank in England. Would I have to pay Capital Gains Tax if I transfer within the annual allowance limit?
For example would I be able to transfer £7,000 in Year 1 and then the other two £7,000 in Years 2 and 3?
Does the Allowance/Capital Gains Tax work this way? Or is it an Illegal way to avoid paying tax?
(The money is pretty much pure profit from selling on a permit to build houses. Also Im a student living in England and unemployed).
Thanks in advance! :)
Asked by Alan - 1 year ago
Answer:
If you are a UK resident for tax purposes, you will be liable for capital gains tax when profits are made on certain transactions. The first £10,100 of profit is currently free of tax.
For overseas gains, in principle, the country where the gain was made will apply taxation, and this can be offset against any liability to UK capital gains tax.
The situation is complex and will depend upon where you made the gains. You should take advice however, in all probability, the taxable event has already happened and you are already liable for tax, regardless of where the money is. This limits the tax planning opportunities.
The key point here is, where possible, understand how a profit will be taxed before you realise the profit – this will help minimise tax in the future.
Disclaimer:
The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find an IFA please go to http://www.unbiased.co.uk
Sources:
Danny Cox, Certified Financial Planner, Hargreaves Lansdown
Chartered Financial Planner, Certified Financial Planner and heads the advisory team at Hargreaves Lansdown. Danny is the Money Marketing Best Retirement Planner 2007 and Financial Adviser SIPP Adviser of the Year 2007.